Barclays downgraded Shoals Technologies Group (NASDAQ:SHLS) to Underweight from Equal Weight, cutting the price target on the stock to $19 from $27 in a note to clients on Tuesday.
Analysts told investors in a note that there is risk in the company's 2023 guidance, with bookings made in the last 12 months falling short of the $470-$510 million guide.
In addition, analysts said a "large portion of the backlog and awarded orders is likely tied to new products and new geographical regions, which we have less visibility on."
"Similar to the other utility-scale names under coverage, we estimate shipments were accelerated into 2022 (2022 shipments were up +40% y/y vs. utility-scale installations that were down 35-40%) and there should be a slowdown in shipments this year as the market adjusts and reconciles the difference," analysts wrote, noting that top-line guidance is up 50% y/y.
This suggests that a "large part of the growth is underpinned by revenues tied to new products and new geographical regions, which we have less visibility on," analysts added. The analyst also said the firm expects scrutiny around the breakdown of backlog and awarded orders for Shoals.